Axa XL's science and natural perils team wins InsuranceERM's risk team of the year award for enhancing the underwriter's risk management approach, contributing insightful thought leadership and collaborating globally on research.
It is clear from the entry that the team not only supports the business, but also contributes to the insurance industry's understanding of natural peril risks.
The team conducts in-depth research that addresses all components of the risk equation, covering hazard, exposure and vulnerability. And by integrating these findings with external academic research, the team enhances Axa XL's risk assessment tools and fills knowledge gaps.
Furthermore, the team has developed a robust framework to investigate and form a climate change view of risk for both modelled and non-modelled perils, which enables the risk management function to effectively assess past, present and future climate-related risks.
Another area where Axa XL's science and natural perils team stands out is its pioneering thought leadership. As an example, the group has developed a groundbreaking scientific methodology to account for earthquake clustering and aftershocks in catastrophe models, which is already operational and has attracted significant interest.
In addition, the team is actively engaged in research projects with leading universities and industry bodies worldwide. Such a collaboration with Colorado State University and the Barcelona Supercomputing Centre has enabled Axa XL to leverage a large number of seasonal hurricane predictions from major agencies and universities and enhance its decision-making year-on-year.
Axa XL's science and natural perils team is also the first in the market to explore ways to forecast future wind vulnerability. Through a project in collaboration with University College London, it is examining how societal trends, climate adaptation and mitigation strategies, as well as the aging of structures and infrastructure, will influence US hurricane risk in the future.
A spokesperson for Axa XL, which is the P&C and specialty risk division of the Axa group, says this year the science and natural perils team team will focus on initiatives that align with Axa XL's wider commitment of advancing its understanding of climate-related risks; building its view of risk; and enhancing business planning processes.
The spokesperson adds: "We are looking to consolidate a number of scientific collaborations and will continue working with renowned institutions to deepen our understanding of hurricane risk and the impacts of climate change on this industry-critical peril. We will also look for strategic gaps in our research and establish new collaborations to ensure a comprehensive risk management approach to risk management."
Given that natural perils are such a focus for the team, when asked how natural catastrophe modelling is likely to evolve in the next decade, the spokesperson says: "For the next 5-10 years, cat models are expected to become more 'climate change aware'. Vendors have already built climate-conditioned catalogues for a set of models, but we expect that they will enlarge that offering to include more regions, more perils and more climate scenarios. We also expect models including climate change assessment capabilities to become more robust.
"The industry has also seen a large number of climate-focused centers of collaboration and working groups – and we hope this positive change continues."
While there is a lot of discussion around projections of hazard, for different perils and various timelines, the Axa XL spokesperson adds that future projections will also start to involve forecasts of vulnerability and exposure, "for a more holistic representation of risk".
